Many people think that it is impossible for people to get funeral insurance for over 80 years of age. But believe it or not, it is very possible for an octogenarian to receive a life insurance premium that pays a good life insurance benefit to the person’s beneficiaries.
One of the rewarding things about being a life insurance agent is assuring a grieving loved one that their family member was thoughtful and prepared enough to set up a life insurance policy. With the average cost of a funeral being $10,000 – $15,000, funeral insurance lifts a weighty burden off the shoulders of those left behind.
There are a multitude of reasons why someone should buy life insurance, even people who are over 80 years old. Here is all you need to know about funeral insurance and why you should have it.
Funeral Insurance Definition
When people mention funeral insurance, they are usually thinking 1 of 2 things. Either they are talking about prepaid funeral insurance or final expense life insurance.
These are two different things and should be understood so you can make the right choice when it comes to paying for your funeral and final expenses. Lets take a look at these insurance policies.
Prepaid Funeral Insurance
Prepaid funeral insurance seems like an easy choice. It usually works like this:
A person goes to a funeral home to plan their funeral, naturally. While they are there the salesperson talks up the value of a prepaid funeral plan. It sounds great. You pay for your funeral at today’s prices. What’s not to love?
Well, for one, a prepaid funeral plan can be more expensive than a traditional final expense life insurance policy. You may end up paying more in a premium than what your loved ones will receive at the time of your death.
Second, your beneficiaries shouldn’t expect for the full funeral expense to be paid if the funeral plan is not paid up. So much for insurance.
Lastly, a funeral insurance plan only pays for the funeral. But what if you want to leave something else for your kids, nieces, nephews, grandkids, etc? What if you want to help them out with other bills or debts that you had not taken care of? A funeral plan won’t help with those things.
Compare that to final expense life insurance…
Final Expense Life Insurance
For most people 80 years of age and older, a final expense life insurance policy will be a more valuable purchase for several reasons.
First, the premiums are not as high as you would imagine. I go into that in more detail below, but an 80-year old female with average health history can get a $10,000 policy for less than $130 per month, with a money back guarantee. For many people, that is a lot of money, but if the goal is to take the financial burden off of your family when you die, then final expense insurance is a great way to give them some peace.
Next, once the policy is signed and in place you and your beneficiaries can take comfort in that in most cases the entire face amount will be paid when you die, even if you die the day after you pay your first premium. If you have a severe medical condition that the insurance company declares too “risky” then there will be a reduction until a certain amount of time passes, but your insurance agent is required to disclose that up front so no one is taken by surprise.
Third, your beneficiaries are allowed to do whatever they want with the death benefit. This allows you to leave a little something to your family, even after they have paid for your funeral and final expenses.
Based on the cost, security, and freedom associated with a final expense life insurance plan, this type of policy will be best suited for most people.
Why Should Someone Buy Funeral Insurance For Over 80 Years Of Age?
It’s easy to think that once someone is over 80 years old it’s too late to buy life insurance. But it’s not. And after all, no matter how much we don’t like to think about it, we’re all going to die.
Gofundme isn’t life insurance. Neither is making a family member pay for your funeral. The absolute best way to take care of your family at the time of your death is to be responsible and prepared.
Here are three reasons you should buy funeral insurance even if you’re over 80.
Pay For Your Funeral
This one is obvious. You buy funeral insurance to pay for your funeral. The average cost of a funeral is in excess of $10,000. Do you want your kids or grandkids to go into debt over that?
Some people will say that they’ll go the cremation route. That’s fine, and less costly. However, it still can be $5,000. I don’t have $5,000 hanging around to pay for that. Do your loved ones?
Funerals are expensive, and no matter if you want a simple funeral, your family members will want you to be respected and honored in your death. But it doesn’t come cheap. Funeral insurance helps pay for that.
Pay Off Bills
Not many of us leave this earth debt free. What about your car payment? What about your mortgage or rent? Yeah, your kids may end up selling those things, but it doesn’t happen immediately. What about the 2-3 months it takes for them to get your affairs in order? The bank will still want payments to be made.
And if you own a home that’s paid off, don’t forget the property taxes that are still owed on your home. There are processes in place for when something like this happens, but in the meantime, the taxing authority still expects to get paid.
Leave Something Behind For Your Loved Ones
Once funeral and final expenses and debts have been paid, many people like to be able to leave a little something extra for their family to put in a bank account. It’s like a final gift to those they love.
It could be a way to help your child with a couple months of rent. Maybe your grandchild needs tuition help. These are just a couple of reasons people of all ages wish to leave a financial gift to their beneficiaries through life insurance.
How Can People Over 80 Be Eligible For Final Expense Insurance?
Another advantage of final expense funeral insurance is that it is very easy to qualify. The underwriting for a policy of this sort is not nearly as complicated as a typical term policy for example.
A final expense application is usually 2-4 pages. The insurance company wants to know of any recent hospitalizations or significant diseases or diagnoses. Depending on how those questions are answered, you will be offered a policy.
However, don’t despair if you can’t pass all of the questions. There are still “guaranteed issue” policies that will still allow you to have a life insurance policy. These policies are a little more expensive and may reduce the benefit if you die within a certain time period.
Still, no matter your health record, you can buy a final expense life insurance policy today and be covered tomorrow.
What Are Current Funeral Insurance Rates For An 80-Year-Old?
It’s hard to know what an individual’s actual life insurance rate is without a quick interview to find out more about the person. Since the underwriting for funeral insurance is not very complicated, a life insurance agent will be able to quickly walk through these questions and determine the rate.
Here is a list of things that will affect a funeral insurance rate:
- The actual insurance company (some companies are known for lower rates)
- Home location
- Height and weight
- Smoker status
- Medical conditions
- Prescription drugs being taken on a regular basis
Sample Final Expense Life Insurance Rates For An 80-Year Old
Please make sure you understand that insurance rates change all the time. As I mentioned above, there are several variables that affect a life insurance rate.
That being said, one of the life insurance companies I represent currently is offering a $5,000 policy for just $52 per month for a non-smoker with relatively decent health. That’s not bad at all. To be 80 years old and guarantee your family $5,000 for just a little more than $50? I bet you didn’t think it would be that cheap.
Contrary to what you may have thought, it is not difficult for someone 80 years old or older. Even if the individual has health issues or is a smoker, quality and affordable life insurance is available.
As you can see, funeral insurance for over 80 doesn’t cost a ton. If you need more information or would like a quote, contact us today, and we’ll be happy to walk you through the options!